New 527 groups enter the political debate
by Laura McCallum, Minnesota Public Radio
July 25, 2004

Members of ACT canvassed a Minneapolis neighborhood recently, talking to voters about the upcoming elections. (MPR Photo/Tom Scheck)

A group billing itself as the largest voter mobilization project in American history plans to become a major presence in the presidential race in Minnesota this year. America Coming Together, or ACT, wants to knock on 700,000 doors in the state before Nov. 2. ACT's goal is to defeat President Bush, but legally, it can't work with the Democratic party. ACT is a 527 organization, which means it can raise unlimited amounts of money to try to elect Democrats.

St. Paul, Minn. —
America Coming Together has set up shop in Minnesota and 16 other battleground states, sending canvassers door to door to talk to voters about issues in the presidential race.

ACT canvassers ask voters what they consider the most important issue facing the country, if they consider themselves Democrat or Republican, who they plan to vote for in the presidential race, and if they're registered to vote.

Eibensteiner said ACT undermines the spirit of the McCain-Feingold campaign finance law passed by Congress. The law stopped unregulated soft money contributions from corporations, unions and individuals to national party committees. Now, much of that money goes into ACT and other 527s, a type of non-profit organization named for a section of the tax code. 527s have been legal for three decades, but they're now being created for political purposes.

Steve Rosenthal, who used to mobilize union voters for the AFL-CIO, helped form America Coming Together. Rosenthal said when McCain-Feingold passed, it became clear that the party committees would spend less money on get-out-the-vote efforts.

"The law was set up to break the nexus between federal candidates and officeholders and so-called soft money -- which it has done," Rosenthal said. "But the law was never aimed at eliminating all money for organizations like ours. And frankly, if that were the case, it would be a disaster for our democracy. Fewer and fewer Americans are participating in the political process."

Rosenthal said ACT's goals are clear -- to defeat President Bush, elect Democrats up and down the ticket and get more people to the polls. ACT has already raised more than $70 million, and hopes to raise $100 million in this election cycle. That's less than half the amount of soft money both the Republicans and Democrats raised in the 2002 election, but it's a significant amount of money that will be spent in just 17 battleground states.

David Schultz, a campaign finance expert and Hamline University professor, said 527s have found a loophole in the law.

"There's that old metaphor that money in politics is like a water balloon -- you squeeze it one place and it goes somewhere else," Schultz said. "Where it went is to 527s, which is a point of least restriction, least disclosure, least reporting requirements."

Schultz said unlike political parties, 527s aren't regulated by the Federal Election Commission. They report to the IRS, which has much less stringent reporting requirements. The Federal Election Commission deadlocked in May on whether to require 527s to register with the FEC.

Republican officials acknowledge that conservative groups have been slower to jump on the 527 bandwagon, although some conservative 527s are starting up at the national level. State party chairman Eibensteiner said he expects Republicans to start a 527 in Minnesota, but with a different focus than ACT.

"There might be a 527 that raises tons of money for advertising. Not doing grassroots but doing other sorts of things. Because we at the party really have the grassroots kind of organization in place, and we don't need to reinvent the wheel -- or have someone else reinvent the wheel," Eibensteiner said.

ACT isn't the only national 527 targeting Minnesota. A group called the Young Voter Project is trying to turn out young Democrats in Minnesota, Oregon and Ohio. But ACT is by far the biggest. It hopes to reach nearly every voter in the metropolitan area, and plans to target some outstate communities as well.